Recession's pains put nursing homes at risk

Funding cuts, coupled with poor economy, could mean layoffs, closings

Dave Collins Associated Press

Published 1:00 am, Monday, October 5, 2009

HARTFORD, Conn. — The nation's nursing homes are perilously close to laying off workers, cutting services — possibly even closing — because of a perfect storm wallop from the recession and deep federal and state government spending cuts, industry experts say.

A Medicare rate adjustment that cuts an estimated $16 billion in nursing home funding over the next 10 years was enacted at week's end by the federal Centers for Medicare and Medicaid Services — on top of state-level cuts or flat-funding that already had the industry reeling.

And Congress is debating billions more in Medicare funding cuts as part of health care reform.

Add it all up, and the nursing home industry is headed for a crisis, industry officials say.

The funding crisis comes as the nation's baby boomers age ever closer toward needing nursing home care. The nation's 16,000 nursing homes housed 1.85 million people last year, up from 1.79 million in 2007, U.S. Census Bureau figures show.

Already this year, 24 states have cut funds for nursing home care and other health services needed by low-income people who are elderly or disabled, according to the Center on Budget and Policy Priorities, a nonprofit research firm based in Washington, D.C.

Some facilities are now closed because of money problems — including four in Connecticut — and others have laid off workers because of what industry officials say are inadequate Medicaid reimbursement rates. Medicare cuts are troubling, they say, because the higher Medicare reimbursements have been used to compensate for the lower Medicaid rates.

In Griswold, Conn., the community's only nursing home shut down earlier this year because of rising costs and an inability to pay for $4.9 million in needed renovations for the 90-bed facility.

"A 92-year-old woman was screaming and crying as she was loaded into the ambulance, saying 'This is my home,'" Griswold representative Philip Anthony said. His 88-year-old mother was a resident of the same home at the time.